What to Expect from the New Minimum Wage Law in Maryland
By Patricia Fenati
In the 1980’s when my teenagers wanted spending money of their own, they found jobs after school and during the summers. They worked in our town in pizza shops, the local movie theater, vegetable stands and as life guards. Minimum wage in those days was under $5.00 an hour.
Once working, they were expected to put half of each paycheck into a savings account. They were then free to do what they wanted to with the remaining money. We co-signed checking accounts for them and later cosigned for a low limit credit card that would enable them to pay anything that was charged. Even though they had low paying jobs, our teens gained some financial independence by learning about the basics of money management and the expectations of employers.
No one in the 1980s could raise a family on the $5.00 minimum wage … nor can minimum wage recipients support a family today ... not even the new minimum wage of $15.00 mandated this year in the State of Maryland …
Interestingly, passionate opposition to the Maryland Minimum Wage Law came from the poorest parts of the state. Larger, affluent counties with the highest paying jobs, most above the new minimum wage to begin with, were not interested in the needs of other parts of the state. Not only was there little concern in affluent counties for the loss of jobs, but they were not interested in allowing poorer counties to make decisions based on their own needs.
A business in far Western Maryland that is barely making ends meet has only a few ways to comply with the salary increase demanded by the state:
- Increase prices, which could eat into paychecks of the customer base, already in poor
- Cut hours (loss of pay for workers)
- Get by with fewer workers (loss of jobs)
- Move the business to a nearby state (loss of local jobs)
- Close the business (loss of jobs)
Montgomery County increased the minimum wage before the state did. This year the minimum hourly wage requirement is $12.00, and it will be going to $15.00 by 2024. A friend who has a store in a nearby county told me she has a small staff who work in her shop. Her workers all love what they do and are working to bring extra money into their households. Last summer, before the state passed the law, my friend said that if the state minimum wage goes up and she has to pay the mandated wage, she would have to close her shop.
The new minimum wage in Montgomery County is already eliminating low paying jobs. In the small town where I live, we’ve had the same three fast food restaurants for over 30 years. As the minimum wage increased, two of them have closed their doors this past year. That is probably a loss of 30 or more jobs in our small town.
While minimum wage laws do not require anyone under 19 to be paid the new mandated wage, a workplace that is open all day must rely on workers who are not in high school and must therefore be paid minimum wage. The closing of a restaurant site not only takes those jobs away entirely but also ensures that there are fewer jobs for teens too. Some of those teenagers might learn money management skills as my teens did while others may actually need the work to augment family income.
For the most part, Montgomery County jobs pay more than those in the rest of the state. However, there will still be consequences. While there may not be a significant loss of jobs here, many service jobs will suffer. This will lead to longer wait times, more self-service, ordering food through kiosks rather than from a counter clerk; inconveniences for some of us but severe losses for the people who no longer have those service jobs.
Wouldn’t more progress be made if state lawmakers could find ways to bring better paying jobs to depressed areas of the state? Some of the “feel good” laws have already caused unanticipated negative consequences for the people that these legislators say they are trying to help.
NOTE: This article was previous published in The Washington Examiner.